Muslim Money Guide

Education Planning

If you are saying “I’m in college and broke!” You’re not alone. Remember, financial planning is still relevant to you, even if you are just getting by. Here’s 7 tips to help you plan your finances while studying.

A short presentation on Financial Planning Tips for College Students
Hosted by NEYA, Clear Lake, TX

As freshman commence their journeys, sophomores return for another year, juniors pray they can make it to senior year and seniors struggle with senioritis, it’s time for all of us to take a step back and learn so that gaining education doesn’t cost us the rest of our lives.

We must ask ourselves a few questions:

How do I avoid debt in general?

As a Muslim, how do you avoid incurring student loan debts?

Isn’t it too late? Shouldn’t I have been saving for the past 20 years?

These are all legitimate questions that we should genuinely be asking ourselves. For decades, Muslim students have been graduating and earning degrees from institutions of higher education and during this time they have witnessed the cost of education increase exponentially. Just speak to your parents. When they hear how much school is going to cost this upcoming year, they are baffled.

If you have kids, or are thinking of having kids, one of the biggest concerns you will have in the future is paying for their education. While you may say “Why worry about that now? That’s not going to happen for another 18 years!” its really important for you to think about it now. Costs of college education are rising exponentially. Colleges that cost only $500 a semester in the 1970’s now average over $9,000. The long term trend for college tuition is that it rises about 6% above the inflation rate.

If you are not saving for yourself, you may want to consult this article. If you’re on the right track there, you can start to look at education savings accounts. There are several types that you can use:
– Pre-paid 529 Plans,
– Investment 529 Plans,
– Coverdell Education Savings accounts,
– UTMA (Uniform Transfers to Minors Act) accounts
In the next few articles I’ll cover how each of these works, which ones may be a better choice for you, and where you can find Shariah compliant offerings for each of these.